The Central Bank of Libya (CBL) may open up to US$2 billion in letters of credit (L/Cs) with the aim of helping the country out of its massive liquidity crisis.

The news emerged after a meeting between the CBL and various other institutions, including Libya's Tripoli-based Audit Bureau.

Liquidity crisis

A bureau statement issued after the meeting said its purpose was, "to discuss the liquidity crisis experienced by the country and the development of proposals and solutions for the immediate and medium term."

"It was agreed to accelerate the resolution of the crisis through a number of procedures that would speed up the flow of funds in banks by opening L/Cs to provide basic goods," the statement said.

Exchange rate differences

Media reports after the meeting suggested CBL may open L/Cs worth up to US$2 billion at an official exchange rate of around 1.3 Libyan Dinar (LD1.3) to the US dollar for importers.

At the time of the meeting, black market exchange rates were reportedly as high as LD4.5 to the US dollar.

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